The move proposed to widen the tax base was meant to rope in firms that perennially declare losses – which are sometimes cooked – but will hit genuinely struggling corporates hard, according to manufacturers. This is even more difficult because no bank will lend you to go and pay tax when you are already making a loss,” Mr Githuku said in an interview. KAM had described the tax as catastrophic, coming at a time when firms will be recovering from slowdowns occassioned by the Covid-19 contagion and given that even loss-making firms still pay several other taxes. MANUFACTURING SECTOR“The proposed tax will negatively affect sustained business operations and significantly hamper cash flows. This will push struggling entities to premature closure, leading to loss of jobs and sending the economy on a downward spiral.

Source: Daily Nation July 10, 2020 06:00 UTC